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Toyota Recalls More Than 6 Million Vehicles Shares Fall

Toyota Factory

Toyota Motor Corp., the world’s largest automaker, recalled 6.76 million vehicles globally. The shares extended declines.

The five recalls involve 27 Toyota models, the Pontiac Vibe and the Subaru Trezia, the company said in an e-mail. Given some models are involved in duplicate recalls, the total number of vehicles remedied is 6.39 million, it said. Toyota, which isn’t aware of any injuries or fatalities, said it’s recalling the vehicles for issues ranging from spiral cables to seat rails and engine starters, it said.

President Akio Toyoda has pledged to improve Toyota’s recall process after regulators punished the company for covering up information and being too slow to call back more than 10 million vehicles in 2009 and 2010. General Motors Co. (GM) now faces similar scrutiny for its handling of flawed ignition switches that the company knew of as early as 2001 and has linked to at least 13 deaths.

Toyota fell by as much as 4.9 percent to 5,348 yen in Tokyo trading after the announcement. It traded at 5,409 yen, down 3.8 percent at 2:22 p.m. in Tokyo.

3-Year Freeze

Toyoda has instituted a three-year freeze on new car plants to tilt the company’s priorities to quality and efficiency after the 2009-2010 recalls for problems tied to unintended acceleration.

Following its crisis, Toyota said it improved procedures that had been too dependent on decision-making in Japan and didn’t give regional operations the autonomy to make fixes. The carmaker also formed a global quality group that Toyoda has chaired.

Toyota agreed to pay $1.2 billion last month to end a U.S. probe of its attempt to hide safety defects in the largest criminal penalty imposed on an automaker in the U.S. The company admitted wrongdoing and submitted to reviews by an independent monitor that will assess its safety reporting practices.

It’s the second major global recall for Toyota this year. A recall of 1.9 million Prius hybrids in February covered more than half of the models sold since its debut 17 years ago. The company will update software to fix glitches that could cause them to lose power or shut down and stop.

Recalls haven’t slowed down earnings. Toyota has forecast profit for the year ending March 31 will surge to a record 1.9 trillion yen ($18.6 billion). The automaker has set a target of selling an unprecedented 10.32 million vehicles in 2014 after leading GM and Volkswagen AG in global auto deliveries for a second straight year in 2013.

(Source: Bloomberg)